Home Values Gap Widens

By Quicken Loans, Special for USDR

Home values continue to lag owners’ expectations. Appraised values were an average of 1.93 percent lower than what homeowners expected, according to Quicken Loans’ National Home Price Perception Index (HPPI). The gap between estimated value and appraised value, on a national level, continued to widen for a sixth consecutive month.

Appraisals are falling farther from owner estimates, but they are rising higher each month. Home values rose an average of 0.63 percent in May, and increased 4.92 percent year-over-year, as measured by Quicken Loans’ National Home Value Index (HVI)

Home Price Perception Index (HPPI)

At the beginning of the mortgage process a homeowner estimates what their home is worth. Later in the process an appraiser reviews the home, and the local comparable sales, to establish their opinion of the home’s value. The Quicken Loans HPPI showed that owners’ home value estimates were an average of 1.93 percent below appraisers’ opinions of the value, at a national level. There was a slight widening between the two data points since April, when there was a 1.90 percent difference. May is the sixth month the two valuations moved farther apart. Despite the national average, perceptions varied across the country. In Denver or Dallas appraisals were nearly 3 percent higher than expected, while in Philadelphia or Baltimore appraised values were more than 3 percent lower than what homeowners estimated.

“It’s important for consumers to see the HPPI and not only think about the difference in perceptions, but the different perceptions across the country,” said Bill Banfield, Quicken Loans Executive Vice President of Capital Markets. “Home values, and home value changes, vary widely depending on the city you’re in. Homeowners, and those looking to buy a home, should keep a close eye on their local market to better understand home values in their area, and the trend they are on.”

Home Value Index (HVI)

Home values rose at a national level, and in much of the country, according to the Quicken Loans HVI – which measures home value changes based solely on appraisals. Nationally, appraised values increased 0.63 percent from their level in May, and rose 4.92 percent when viewed annually. The Northeast was the only region measured that showed a home value loss, with appraisals dropping 1.63 percent since the previous month. However all four regions had year-over-year gains, ranging from a 1.15 percent increase in the Northeast to a 6.85 percent increase in the West.

“The strong demand for housing paired with the low levels of inventory continue to push values higher,” said Banfield. “Prices are rising as values push higher, making many parts of the country enticing markets for sellers. Many owners will find that they can get more than expected out of their home.”

HVI

May 2017

January 2005 = 100

HVI

May 2017

vs.

April 2017

% Change

HVI

May 2017

vs.

May 2016

% Change

HPPI

May 2017

Appraiser Value vs. Homeowner Perception of Value*

HPPI

May 2016

Appraiser Value vs. Homeowner Perception of Value*

National Composite

102.16

+0.63%

+4.92%

-1.93%

-1.90%

*A positive value represents appraiser opinions that are higher than homeowner perceptions. A negative value represents appraiser opinions that are lower than homeownerperceptions.

Geographic

Regions

HVI

May 2017

January 2005 = 100

HVI

May 2017

vs.

April 2017

% Change

HVI

May 2017

vs.

May 2016

% Change

HPPI

May 2017

Appraiser Value vs. Homeowner Perception of Value*

HPPI

May 2016

Appraiser Value vs. Homeowner Perception of Value*

West

123.88

+1.51%

+6.85%

-1.63%

-1.56%

South

104.32

+0.51%

+5.07%

-1.90%

-1.87%

Midwest

84.94

+1.00%

+5.11%

-1.97%

-2.12%

Northeast

95.68

-1.63%

+1.15%

-2.12%

-2.06%

*A positive value represents appraiser opinions that are higher than homeowner perceptions. A negative value represents appraiser opinions that are lower than homeownerperceptions.

Metropolitan

Areas

HPPI

May 2017

Appraiser Value vs. Homeowner Perception of Value*

HPPI

April 2017

Appraiser Value vs. Homeowner Perception of Value*

HPPI

May 2016

Appraiser Value vs. Homeowner Perception of Value*

Denver, CO

+2.58%

+2.72%

+3.28%

Dallas, TX

+2.48%

+2.55%

+2.07%

Seattle, WA

+1.38%

+1.32%

+0.03%

San Francisco, CA

+1.21%

+1.10%

+2.87%

San Jose, CA

+1.16%

+0.72%

+3.00%

Portland, OR

+1.14%

+1.44%

+1.62%

Los Angeles, CA

+0.90%

+0.99%

+0.81%

San Diego, CA

+0.67%

+0.42%

+0.06%

Boston, MA

+0.64%

+0.82%

+0.41%

Charlotte, NC

+0.64%

+0.53%

-1.22%

Miami, FL

+0.62%

+0.44%

-0.14%

Sacramento, CA

+0.45%

+0.50%

+1.29%

Houston, TX

+0.40%

+0.45%

+1.44%

Minneapolis, MN

+0.36%

+0.42%

-0.51%

Kansas City, MO

-0.12%

+0.32%

-1.43%

Phoenix, AZ

-0.13%

-0.37%

-0.63%

Riverside, CA

-0.18%

-0.16%

+0.60%

Las Vegas, NV

-0.20%

-0.38%

-0.51%

Detroit, MI

-0.99%

-1.19%

-3.39%

Atlanta, GA

-1.22%

-1.11%

-1.33%

Tampa, FL

-1.24%

-1.38%

-1.06%

Washington, D.C.

-1.29%

-1.05%

-0.23%

New York, NY

-1.88%

-1.86%

-1.75%

Cleveland, OH

-2.46%

-2.26%

-2.12%

Chicago, IL

-2.62%

-2.37%

-2.89%

Baltimore, MD

-3.10%

-3.01%

-3.37%

Philadelphia, PA

-3.32%

-3.37%

-3.48%

*A positive value represents appraiser opinions that are higher than homeowner perceptions. A negative value represents appraiser opinions that are lower than homeownerperceptions.

About the HPPI &HVI

The Quicken Loans HPPI represents the difference between appraisers’ and homeowners’ opinions of home values. The index compares the estimate that the homeowner supplies on a refinance mortgage application to the appraisal that is performed later in the mortgage process. This is an unprecedented report that gives a never-before-seen analysis of how homeowners are viewing the housing market. The HPPI national composite is determined by analyzing appraisal and homeowner estimates throughout the entire country, including data points from both inside and outside the metro areas specifically called out in the abovereport.

The Quicken Loans HVI is the only view of home value trends based solely on appraisal data from home purchases and mortgage refinances. This produces a wide data set and is focused on appraisals, one of the most important pieces of information to the mortgageprocess.

The HPPI and HVI are released on the second Tuesday of every month. Both of the reports are created with Quicken Loans’ propriety mortgage data from the 50-state lenders’ mortgage activity across all 3,000+ counties. The indexes are examined nationally, in four geographic regions and the HPPI is reported for 27 major metropolitan areas. All indexes, along with downloadable tables and graphs can be found at QuickenLoans.com/Indexes.

About Quicken Loans

Detroit-based Quicken Loans Inc. is the nation’s second largest retail home mortgage lender. The company closed more than $300 billion of mortgage volume across all 50 states between 2013 and 2016. Quicken Loans moved its headquarters to downtown Detroit in 2010, and now more than 17,000 team members from Quicken Loans and its Family of Companies work in the city’s urban core. The company generates loan production from web centers located in Detroit, Cleveland and Scottsdale, Arizona. The company also operates a centralized loan processing facility in Detroit, as well as its San Diego-based One Reverse Mortgage unit. Quicken Loans ranked “Highest in Customer Satisfaction for Primary Mortgage Origination” in the United States by J.D. Power for the past seven consecutive years, 2010 – 2016, and highest in customer satisfaction among all mortgage servicers the past three years,  2014 –2016.

Quicken Loans was ranked #10 on FORTUNE magazine’s annual “100 Best Companies to Work For” list in 2017, and has been among the top-30 companies for the past 14 consecutive years. The company has been recognized as one of Computerworld magazine’s ‘100 Best Places to Work in IT’ the past 13 years, ranking #1 for eight of the past twelve years including 2017. The company is a wholly-owned subsidiary of Rock Holdings, Inc., the parent company of several FinTech and related businesses. Quicken Loans is also the flagship business of Dan Gilbert’s Family of Companies comprising nearly 100 affiliated businesses spanning multiple industries. For more information and company news visit  QuickenLoans.com/press-room.

SOURCE Quicken Loans

All opinions expressed on USDR are those of the author and not necessarily those of US Daily Review.
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